The shares of Huntsman Corporation (NYSE:HUN) and Estee Lauder Companies, Inc. (The) (NYSE:EL) were among the active stocks of the last trading sessions. Huntsman Corporation (NYSE:HUN) declined to -0.72% closing at the price of $23.58 whereas the shares of Estee Lauder Companies, Inc. (The) (NYSE:EL) declined -1.4% with the decrease of -1.82 points closing at the price of $128.08. Huntsman Corporation has currently decrease -20.95% in its stock over the period of 6-months while its rival Estee Lauder Companies, Inc. (The) subtracted -13.93% in the previous 6-months.
Now we have to analyze the facts that if the stocks were worthy off investors’ money? The facts to analyze here are risks, profitability, returns and price trends.
Returns and Profitability
Profitability and returns are the main reason of investment, the investors are looking for profits that they get and return they should expect over the period of time.
The first and foremost return that is considered while making an investment is the ROI or Return on Investment. The ROI is the ratio between the profit against the cost of investment. Currently the ROI of Huntsman Corporation (NYSE:HUN) is 13.8% while the ROI of Estee Lauder Companies, Inc. (The) (NYSE:EL) is 19.6%. Another figure that is to be considered while analyzing the profitability of a share is its EBITDA margin, HUN’s EBITDA Margin is 6.64 whereas EL’s is 18.51.
Both the profitability ratios suggest that Estee Lauder Companies, Inc. (The) (NYSE:EL) is more suitable investment in terms of profitability and return.
EPS & Surprise Factor
Huntsman Corporation (NYSE:HUN) reported $1.01/share EPS for the previous quarter where analysts were predicting an EPS to be $0.84/share Thus beating the analyst Estimates with a Surprise Factor of 20.2 Percent. While, Estee Lauder Companies, Inc. (The) (NYSE:EL) reported EPS of $0.61/share in the last quarter. The analysts projected EPS of $0.56/share depicting a Surprise of 8.9 Percent.
Taking a look at Earnings per Share, Huntsman Corporation tends to be beating the analyst estimates more than Estee Lauder Companies, Inc. (The). so HUN is more profitable than EL.
Technical Analysis of Huntsman Corporation & Estee Lauder Companies, Inc. (The)
Moving average convergence divergence (MACD) shows that Huntsman Corporation (NYSE:HUN) is on a PRICE RELATIVITY trend While Estee Lauder Companies, Inc. (The) (NYSE:EL) is on PRICE RELATIVITY trend. The trend for the past 10-days shows that the Huntsman Corporation was in BEARISH territory and Estee Lauder Companies, Inc. (The) was in BEARISH territory.
HUN’s current statistics gauge that the stock candle is BEARISH with HIGH volatility. While EL’s candle is BEARISH with HIGH.
EPS Growth Rate: HUN’s 8% versus EL’s 11.17%
Another shareholder value can be analyzed through the EPS growth rate; the next 5 years EPS growth rate is predicted by the analysts after the analyzing the previous trends. The next 5 year EPS growth rate of Huntsman Corporation (NYSE:HUN) is predicted at 8% while Estee Lauder Companies, Inc. (The) (NYSE:EL) stands at 11.17%. These numbers suggest that EL is more suitable investment in terms of EPS growth rate.
Financial Risk and Liquidity Concerns
The current ratio and the debt ratio are the two ratios that show the investor how quickly the company is able to payout its debt and how quickly it can cover its obligations. The current ratio of HUN stands at 1.9 while EL is at 1.9 whereas the debt ratio of the prior is 0.84 while the debt ratio of the later is 0.76.
The values of the both ratios suggest that one is more liquid and other investment is more risk free.
While making an investment, another main factor to consider before investing is the analyst recommendation on the scale of 1 to 5 where 1 is strong buy, 2 is buy, 3 is hold, 4 is Sell and 5 is strong sell. Analyst recommend 2.1 for HUN and 2 for EL which means HUN has Hold rating whereas EL has Buy rating.
Another recommendation of analyst that is to be considered worthy is the price target. The mare price or price trend does not suggest the suitability of a stock. The price target set by analyst is also to be considered while investing as it suggests to what extent the stock will rise or fall in the near future. The price target set for HUN is $38.47 which is 38.71% of its current price while EL has price target of 156.73 which is 18.28% of its current price.
Valuation is the process of determining the company’s worth for an investor, the valuation ratios give an insight to that worthiness.
HUN currently has price to earning P/E ratio of 7.62 whereas EL has 31.35 while the forward P/E ratio for the prior stands at 6.8 and for the later it depicts the value of 24.13.
The price to Book P/B for HUN is 1.84, Price to Sale is at 0.64 and for EL these ratios stand at 10.03 and 3.4.